NCRI and Money Laundering
One of the tricks NCRI/MKO uses in Europe to fundraise is to form front associations with the purported aim of supporting Iranian children and asylum seekers. This Group, by gaining the sympathy of ignorant people and extracting money from them, has collected considerable amount of money and used it to finance its terrorist operations.
One such association for collecting money is the “Society for the Support of Iranian Refugee Children” in Germany. Under the supervision of this front association in Köln the children who have been separated from their parents residing in “Ashraf”161 base in Iraq by NCRI/MKO are raised.
In this regard the German "Focus" magazine, no. 2000/29 stated: “Reliable information indicates that MKO, with prior intention, separated children from their families2 and secretly brought them to Germany and under the false pretences that they were orphans and homeless children, lodged them in the Child Care buildings so that it could receive governmental financial aid and then transfer it to the bank account of the organisation.
For this purpose the Society for the Support of Iranian Homeless Children in Köln was estab-lished in 1993. From the text of the Code of Conduct of the Society, it was obvious that these children were kept under the strict supervision of Iranian mentors, so that under a brain-washing program, prepare these children to return to Iraq and fight the Iranian State.”
"Focus” refers to a letter sent by an Iranian youth who was trained in this child care house in Köln and who went to Iraq to his friend in Köln. In his letter written in 1998, this 16 year old Iranian youngster writes the following to his friend in Köln: “We were firing guns, and you can not understand how much I was excited when I was hit-ting right to the target.”
The "Focus "magazine quoting the German Federal Criminal Police (BKA) added: “This Society was formed under the name of a charity organisation to collect money and other financial gains by Mojahedin Khalgh organisation.”
The German newspapers repeatedly uncovered illegal activities of the association for the Support of Iranian Refugee Children and revealed that despite its claim for supporting Iranian child refugees and orphans, this group has collected millions of German Marks each year in a highly professional manner using money laundering methods. The money collected would then be transferred to MKO’s account. 
Another example of fraud and extortion done by this group through charity organisations is the creation of “Iran Aid” in United Kingdom.
By using this charity organisation, NCRI/MKO in the UK extracts money from people and students with abject means, even using intimidation. In this way the group collects money from the people under the guise of “Iran Aid” and in the name of helping the families of those killed or political prisoners in Iran. These shameful acts for collecting money were the reason for many com-plaints filed against the group with the UK Charity Commission. Some information and figures relating to the past two years show that this group collected annually about 2 to 4 million pounds by using the above mentioned methods. “Therefore, for the sake of clarifying the situation, a Commission entitled the “Commission of Charity Affairs” was set up to carry out extensive inves-tigations about the performance of this organisation and its purposes and the ways and means of spending the money collected. In 1997, after these investigations the Society was dissolved and its assets were confiscated.” 
The other scandalous event in collecting money for terrorist operations was the arrest of 5 Iranians and 2 Americans of Iranian origin in the United States in March 1991. These people were arrested on charges of collecting more than one million dollar to finance terrorist operations. The seven men, Tahmineh Tahmtan, Mostafa Ahmadi, Hussein Afshar, Ali Reza Moradi, Hussein Rezaei, Najaf Taji Oshtofteghi and Mohammad Omidvar were later put on trial.
The LA Times, quoting the FBI, reported that most of the money was collected from ignorant passengers in LA International Airport and transferred to MKOs’ bank accounts in Turkey.
James Dissaro an FBI official in LA stated: “The FBI arrested these 7 persons after carrying out extensive investigations which lasted 3 years. It is said that all these people were members of a cell belonging to MKO. Only one of the detainees denied his affiliation to MKO. MKO members in the name of a Charity Committee for the Defence of Human Rights collected money from passengers, mostly Asians, under the false pretences of helping refugees. They showed the photos of children suffering from hunger and apparently victims of mistreatment and torture in Iran. In this way, they gained the sympathy of passengers by telling them that they want the money to help the refugees.” 
According to the FBI, this group was able to collect daily about 5 to 10 thousand dollars in LA alone and for this purpose it set up a Committee by the name of “Charity Committee for the Defence of Human Rights” which is a fake name. In this way, the money collected was transferred from Los Angles to NCRI/MKO bank accounts in Turkey. According to investigating officers, the money was then distributed to different locations and in one instance more than 400,000 USD was sent to the account of a spare parts shop in United Arab Emirates.
The interesting and noticeable point is that this terrorist group, after being included in the list of terrorist organisations by the United States and European Union, continued its illegal activities under the cover of the National Council of Resistance of Iran (NCRI). This is a tactic for mis-leading European Union officials. It seems that this tactic has worked because the name of NCRI does not appear in the list of proscribed terrorist organisations of the European Union. But US officials have included the name of NCRI along with MKO in the list of terrorist organisations and have barred its activities in the US.
After the invasion by coalition forces in Iraq and the downfall of the Ba’ath Party, NCRI became the main source of fundraising for the MKO, which illegally and secretly transferred the assets and money belonging to MKO from Iraq to Europe. In this connection, the group assigned two of its members, Jamil Bassam and Ebrahim Khodabandeh, both having British Nationality to go to the Iraq-Syrian border and take delivery of a heavy pack containing hard currency and inner-organisation documents from other members of the group coming to the border and then take the pack to England. Iran interlink website reported:
“Mr. Ebrahim Khodabandeh and Mr. Jamil Bassam were arrested at the border of Iraq-Syria on 18 April 2003 while smuggling lots of money and documentation belonging to MKO.” 
On the same website it has also been reported that Baroness Emma Nicholson, Deputy Chairperson of the European Parliament's Foreign Affairs Committee and the Founder of “Ammar Charity” while visiting southern regions in Iran and Iraq met these two accused men. She then wrote a 13 page report and presented it to the European Parliament and UK’s Ministry for Foreign Affairs. According to that report both men claimed that they were misguided by their “cult”  and were unaware about the content of the pack they were carrying with them.